Businesses that implement advance purchase strategies within their organisations are saving more on airfares.
For small to medium-sized enterprises (SMEs) that are keen to keep a tight rein on their air travel spend, one of the proven strategies to boost savings is implementing an advance airfare purchase policy in your travel programme, says Andrew Stark, managing director of Corporate Traveller.
“Whether your business uses a preferred carrier or has opted for an open sky policy, there are significant savings on airfares to be made by being prepared, planning ahead and booking early,” says Stark.
Over the years, airlines have developed complex strategies for managing yield, and as part of this, seats throughout the aircraft are grouped in ticket booking classes. Generally, airlines will sell only a small amount of 'headline' fares for the cheapest seats in Economy Class. The remainder of Economy Class seats are staggered in price, with fully-flexible Economy Class tickets costing more.
Generally, last-minute tickets are more expensive, as the cheaper seats, which are fewer in volume, sell out first. The availability of different booking classes on airlines around the world is dictated by a range of factors, including season, demographic, fare restrictions, market (domestic or international) and inter-airline agreements.
“While a fully-flexible ticket may cost more, they are refundable and can be changed at any time,” says Stark. When booking in advance, travellers need to be mindful that a cheaper, restricted ticket will have more conditions attached to it; therefore, travellers need to know their plans aren't going to change to ensure no additional fees are incurred through booking changes.
Restricted fares won't be suitable for all business travellers, particularly those who frequently make changes to their schedules. At Corporate Traveller, we recommend working with your travel manager to implement a fare purchasing strategy that not only suits your business travel needs and patterns, but sits within your travel policy and budget parameters.
Your travel manager can show you how to reduce your average ticket price by using advance purchase. If you have implemented an open sky policy in your travel programme, there are still savings to be made, particularly if booking during peak periods.
A recent Corporate Traveller study shows that average ticket prices during times of low capacity will almost always rise five days prior to the departure date, with the lowest fare for the route generally advertised 21 days or more out from departure. During peak travel periods, fares start to rise much sooner, making advance bookings a particularly important cost-cutting strategy. During peak and high-capacity periods, such as Christmas, last-minute fares can more than double.
Preferred carrier strategy
Your travel or account manager can identify opportunities to save by negotiating an airline agreement with your preferred carrier that may include cheaper, restrictive fares that can be booked in advance.
By booking in advance, businesses with market share agreements can effectively increase their volume of travel, but continue to meet their contracted targets. This means that businesses can invest in more face-to-face meetings, increase the frequency of their travel, have more people travelling or fly in a higher cabin class.
Include advance purchase in your policy
You can enhance the way you and your people travel by including guidelines in your policy around advance purchase. Communicate your policy clearly and effectively to all your travellers and make sure they know what is expected of them.
The impact of the global financial crisis has seen a number of SMEs introduce two-week advance booking policies into their travel programmes. You will also need to consider what non-compliance measures will be taken if people do not adhere to your policy.
Booking in advance isn't always going to work in the case of emergencies and unforeseen events, but when travellers know an event is happening a few months or weeks ahead, best practice demonstrates it's wise to book as early as possible.
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Flight Centre Limited
Flight Centre Limited now boasts almost 2,000 shops and businesses in eleven countries. The company, through its retail and corporate brands, provides a complete travel service for leisure and business travelers in South Africa, Australia, New Zealand, the United States, Canada, the United Kingdom, Hong Kong, India and China. In addition, the company's corporate travel management network, FCm Travel Solutions, extends to more than 40 other countries through strategic licensing agreements with independent local operators. Internationally, the company employs about 13,000 consultants and support staff. For more information, please visit us at www.flightcentre.co.za
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Issued by Amanda Hardy on behalf of Corporate Traveller
Contact Corporate Traveller on 0860 400 787 or visit corporatetraveller.co.za for more information.